Kyrgyzstan: Tracking Russia's Assistance Package to Bishkek

The Kyrgyz government's efforts to close down an American air base outside Bishkek have been well documented. The same cannot be said for Russia's $2.15 billion assistance package, which many experts believe was offered on the condition that US forces be forced to leave the Central Asian nation. Questions remain whether the Russian assistance deal will ever be fully implemented.

Lingering doubts about a Kremlin double-cross appeared to prompt President Kurmanbek Bakiyev's administration to stall on pushing a base-closure bill through the Kyrgyz parliament. After the government quickly submitted the bill to the legislature, following Bakiyev's February 3 announcement that his administration wanted to close the facility, MPs initially seemed content to sit on the measure. [For background see the Eurasia Insight archive]. The delay, many experts believed, was designed to prod Moscow into delivering on its assistance promises. The Russian package -- which was presented to Bakiyev on February 3 -- just hours before his announcement on the base closure -- includes a $150 million cash payout, a $300 million low-interest loan and $1.7 billion in credits to complete the construct at the Kambarata-1 hydropower plant. Also part of the plan is a debt-for-assets swap, in which the Kremlin forgives Kyrgyzstan's $193 million debt in exchange for a 48 percent share in the Dastan naval munitions plant.

Over the past few days, the base-closure initiative has regained momentum. Several committees held necessary hearings on February 17-18, and a vote to terminate the American lease at the Manas base was scheduled for February 19. A "yes" vote was widely seen as a foregone conclusion, given that Bakiyev's Ak-Jol Party enjoys a super majority in parliament.

Not coincidently, the accelerated action concerning Manas' fate came "after the Kyrgyz government received notification from Russia that the $2.15 billion assistance package was ready," a government official, speaking on condition of anonymity, revealed on February 18.

A final parliamentary vote on Manas would not represent the point of no return, however. Local political analysts emphasize that Bakiyev would still have to sign the bill into law, and when he would do so, if ever, is uncertain. In the meantime, a State Department spokesman, Gordon Duguid, said February 17 that negotiations on new Manas lease terms were ongoing. "We are still talking to the Kyrgyzstan officials about our position on the Manas air base. But we have not received an official rejection of our position," he said.

Manas' fate likely will depend on how the Russian assistance flows. Accordingly, a lot may hinge on the Kambarata hydro power project.

Under the known terms of the $1.7 billion investment, the Russian energy giant Inter RAO UES and Kyrgyz Electric Stations are to set up a joint-stock company, with each party owning 50 percent of the shares. The new company will be responsible for the construction of the long-delayed hydropower plant on the Naryn River. Upon completion, Kambarata-1 would be capable of producing up to 1,900 MW of power per year.

Kyrgyz Prime Minister Igor Chudinov says construction on the project would take approximately seven years, during which Russia would spend as much as $400 million annually. This money is not a loan, but "will be channeled into the Russo-Kyrgyzstani stock company, which is to have been formed by April of this year," he said, according to the newspaper Vecherniy Bishkek.

Construction on the Kambarata complex began in 1986, but was abandoned due to financing problems. The project's backers say the hydropower plant would dramatically enhance Kyrgyzstan's regional influence on water and energy issues.

Joldoshbek Jetignov, technical director at the Naryngidroenergostroy construction company, is among those who believe that Kambarata can ease electricity shortages in Kyrgyzstan and elsewhere in the region. "Given the energy deficits of our neighbors, we can sell electricity to them," said Jetignov, whose company hopes to secure a big share of the construction contracts connected with the project.

Other experts and officials are more skeptical about the economic boost that Kambarata could provide. Social Democratic Party leader MP Baktybek Beshimov expressed uncertainty that Russia would make the promised investment because of Moscow's own financial problems. The "financial situation in Russia might not permit the [Russian] government to make significant investments in the near abroad," he told EurasiaNet.

Nikolai Kravtsov, an energy expert and head of Yustin, an NGO consumer rights advocacy group, also has his doubts about Kambarata. "The necessary economic, financial and technical investigations into the [Kambarata] project have not been carried out, which leaves much ambiguity regarding the price and marketability of the final product," he said. He added that he had not seen numbers to convince him of the project's feasibility.

Meanwhile, international experts privately express doubts about whether the project will ever be completed. Regional water disputes always are capable of frustrating Kambarata plans. Uzbekistan has traditionally been reluctant to support plans that could potentially diminish the amount of water flowing into its territory. Uzbekistan depends on water from both Kyrgyzstan and Tajikistan to irrigate its cotton fields.

In January, Tashkent's perspective appeared to gain the upper hand when Russian President Dmitry Medvedev, on a visit to Tashkent, announced that all Central Asian states deserved to hold veto power over hydropower projects in upstream countries. [For background see the Eurasia Insight archive]. But only days later, the Kremlin's position shifted, as the Russian assistance package to Kyrgyzstan was announced.

A potential precedent for the Kambarata project is the 2004 deal between Russia and Tajikistan to complete the Rogun dam. Russia's reluctance to follow through on its commitments -- inaction that was widely linked to fierce Uzbek opposition to the plan -- finally prompted Dushanbe to formally cancel the deal in 2007. [For background see the Eurasia Insight archive].

Some officials in Kyrgyzstan believe that Moscow feels a critical need to retain control of Uzbekistan's potential natural gas exports. [For background see the Eurasia Insight archive]. Thus, some worry that once American troops left Kyrgyzstan, the Kremlin would not think twice about betraying Bishkek on Kambarata construction in order to appease Tashkent.

Editor's note:

Anvar Rahmetov is a freelance correspondent based in Bishkek. Arslan Mametov contributed reporting.